The nine IPOs that took place in the first quarter raised a total of $1.2 billion, according to Dealogic. That's down from 33 deals worth $5.5 billion in the same period last year and 59 deals worth $10.1 billion in the same period in 2014.

Higher market volatility in late 2015 and early 2016 had IPO investors like hedge funds and mutual funds spooked, and unwilling to take a risk on an untested stock.

But now, everything could change.

Activity begetting activity

Bats' solid performance should reassure investors that IPOs are a worthwhile investment. It should also prompt other companies mulling an offering to seriously consider making their move.

"People will probably wait to see what deals come out and make sure there is a decent tone — and as you see a decent tone, I think activity will beget more activity," said Wells Fargo's Andy Sanford at the time.

Bats traded above its IPO price on Friday.
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Since February, the stock market has been in recovery, and investors have begun to look for opportunities. The lack of IPOs more recently has been more about a lack of supply than a lack of demand, according to people who have attended recent roadshows.

That's where Bats came in.

Its financials were good, and it's a company that many investors were already familiar with because they actually use its services on a regular basis.

Bats made for a good test of the IPO market — and it passed with flying colors. That said, we shouldn't expect to see a whole slew of new deals right away. The Bats deal is still only one data point, and we need to see several more deals take off before the market really opens up.

The good news is, there are several other IPOs on the road right now, and according to sources they're being well-received. If that keeps up, then it's only a matter of time until the ball gets rolling.